WEST MIFFLIN, Pa.-Making good on one of his promises for 2014, President Obama exercised his executive authority with the stroke of a pen Wednesday to create a starter retirement savings program for American workers whose workplaces do not provide traditional 401(k)s.
"What I'm hoping is that working Americans will take a look because I want more people to have the chance to save for retirement through their hard work," the president said at the U.S. Steel Irvin Plant here.
"Wherever I can take steps to expand opportunity for more families, regardless of what Congress does, that's what I'm going to do because I am determined to work with all of you and citizens all across this country on the defining project of our generation, and that is to restore opportunity for every single person who's willing to work hard and take responsibility in this country," he said.
The president signed the memorandum creating the new retirement savings plan in front of the crowd at the steel plant before handing it over to Treasury Secretary Jack Lew.
The new program, called MyRA, will allow Americans to contribute as little as $5 from each of their paychecks to a retirement account. The plan is aimed at households making up to $191,000 a year.
The new plans will be offered as a Roth IRA account and will be backed by the U.S. government. All workers up to the income limits can invest in the accounts, including those who want to supplement an existing 401(k) plan.
Initially, workers can make after-tax investments as low as $25 and contributions for as little as $5 can be made through payroll deductions. They will earn the same interest rate as federal employees do in the Thrift Savings Plan's Government Securities Investment Fund and can withdraw their money at any time without tax penalties.
The program will be available in a pilot mode for employees of employers who sign up to participate by the end of the year.
The president's stop in Pennsylvania was his second after his State of the Union address where he told Congress he is willing to exercise his executive authority if they are not passing legislation on issues like the minimum wage and retirement security.
On Thursday, the president travels to Milwaukee and Nashville for additional events.